Case Study£ºmacmillan and Grunski Consulting

For option with refinance, I completed similar calculations as in options 1 and 2. However, for the first 5 years the payment was as in option 1. Then, I calculated new payment for years 11-15 by using ending balance after 60 months as new loan amount; I used APR of 4.25% compounded monthly. Then, I found present values of tax savings. In this case, present time is after 60 month in house. When

A. The future value of an annuity is unaffected by the amount of each annuity payment.

14. How close does the terminal value in part 2 get to the present value using the growing annuity formula in part 3?

9. What is the present value of an 8-year annuity that makes quarterly payments of $73 if

I. You must have an in-depth explanation of how these could achieve the aims and objectives of your business proposal.

Therefore the annual interest rate is 8% and the effective annual rate compounded quarterly is 8.24%

Week 8 DQ 4Is the compound interest formula—such as would be used to calculate a car loan—an

The cash flows for an annuity must all be equal, and they must occur at regular intervals, such as once a year or once a month.

The executives of Davis, Michaels, and Company need help running their financial planning services. They must decide whether their assistant Janet can practice the fundamental concepts of finance efficiently enough or higher a temporary employee to help them conquer the overwhelming demand of their customers. Janet was given a variety of different DCF analysis questions to determine her skills. The main goal of every problem was to find the best investment strategy for different people that were trying to save up for an important investment in their future. In conclusion, by completing the tasks given and solved below, Janet has proved that she can handle the position

The semi-annual compounded interest rate is 5.2% (a six-month discount rate of 5.2/2 = 2.6%). (15 points)

The group project, Macmillan and Grunski Consulting, consists of two sections. The first part explains the case about discounted cash flow analysis, by answering the given nine questions. The second part discusses the retirement planning.

1. Assume that at retirement you have accumulated $825,000 in a variable annuity contract. The assumed investment return is 5.5% and your life expectancy is 18 years. What is the hypothetical constant benefit payment?

First we need to get the present value of the annuity for the 1,500 semiannual PMTs at year 14

Assume that the annual payments in the sixth year is equal to the rental payment in the fifth year ( 112.9 and 86.0) and the remainder of the lump sum values (54.6 and 17.8) is due in the seventh year. With a discount rate of 5.4%, the present values of the rental payments for the years 2006 and 2007 are as follows:

Step 2. Locate the table value on the Amount of an Annuity table. The table value for 20 periods at 4% is 29.77808.